Retail's fuzzy boundaries and future developments

Retail's fuzzy boundaries and future developments

During the COVID-19 pandemic, consumers have shown a preference for established brands and online marketplaces over direct-to-consumer (DTC) brands. According to recent surveys, over half of Americans consider large online marketplaces like Amazon or Walmart as the most reliable, while DTC brands have fallen behind on the reliability factor.

The reasons for this shift are manifold. Technology has made it easier for consumers to compare options, prices, reviews, and warranties, providing opportunities for a brand to take a competitive advantage. However, customer perceptions regarding ease of purchase and trendiness have also faltered for DTC brands.

Marketplaces like Amazon have upped expectations for service, with free, 2-day shipping becoming the norm. In contrast, DTC brands have faced challenges in logistics and inventory management, causing delays and disappointments for customers. As a result, only seven percent of Americans find DTC brands to be the most reliable over the past six months.

To stay competitive, DTC brands need to focus on offering a seamless experience from the first point of contact through to customer interactions and even returns. Seeking help through qualified partners with the logistics they don't have the ability to handle is crucial for brands.

In addition, 42% of Americans would purchase directly from a branded manufacturer over a third-party if promised free & fast shipping. This preference highlights the importance of investing in efficient logistics and delivery systems for DTC brands.

Traditional retailers have also leveraged their reliability during the pandemic. Well-established brands were able to capitalize on consumer trust, as people tended to stick with familiar brands during uncertain times. This trust helped maintain customer loyalty and ensured continuous sales.

Retailers who were prepared for eCommerce had a successful shift online, while those who weren't struggled to catch up. Companies like Walmart transformed their physical stores into fulfillment centers, offering same-day delivery and pickup, which significantly reduced shipping costs and increased customer satisfaction. This strategic shift helped traditional retailers compete effectively with DTC brands on speed and convenience.

The next evolution of the retail landscape may see a shift from digitally native darlings to more traditional powers, such as branded manufacturers and retailers. The pandemic has shown that these established players have the resources and infrastructure to adapt to changing consumer needs and expectations.

In conclusion, traditional retailers and online marketplaces have an opportunity to leverage their perceived reliability to attract and retain customers in 2021. While DTC brands have faced challenges during the pandemic, they can learn from the successes of traditional retailers and adapt their strategies to meet evolving consumer demands.

[1] Source: [Survey Monkey](https://www.surveymonkey.com/resources/press-releases/americans-choose-large-online-marketplaces-over-direct-to-consumer-brands/) [2] Source: [Statista](https://www.statista.com/statistics/1115494/trust-in-online-retailers-in-the-us/) [3] Source: [Forbes](https://www.forbes.com/sites/forbesagencycouncil/2020/12/09/how-traditional-retailers-are-outperforming-direct-to-consumer-brands-during-the-pandemic/?sh=4d8a3f4d765a) [4] Source: [Marketing Dive](https://marketingdive.com/news/traditional-retailers-are-outperforming-direct-to-consumer-brands-during-the-pandemic/610852/)

1. The rise of technology during the pandemic has made it possible for consumers to easily compare options, prices, reviews, and warranties, allowing brands to gain a competitive advantage, but customer perceptions of ease of purchase and trendiness have faltered for DTC brands.
2. Marketplaces like Amazon have set high standards for service by offering free, 2-day shipping, while DTC brands have faced challenges in logistics and inventory management, causing delays and disappointment for customers, ultimately affecting the reliability factor.
3. For DTC brands to stay competitive, it is crucial to offer a seamless experience from the first point of contact to customer interactions, even returns, and seeking help through qualified partners in managing logistics they don't have the ability to handle is essential.
4. Traditional retailers were able to capitalize on consumer trust during the pandemic, leveraging their reliability to maintain customer loyalty and ensure continuous sales, while companies like Walmart transformed their physical stores into fulfillment centers, offering same-day delivery and pickup, which significantly reduced shipping costs and increased customer satisfaction, helping to compete effectively with DTC brands on speed and convenience.

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